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Sprint Just Strangled the Galaxy Tab

Is Sprint serious?

Somehow it appears that everyone is excited about the tablet market and the opportunity it offers, everyone is jealous that Apple(Nasdaq: AAPL) has figured it out first how to conquer it. Strangely enough, no one seems to want a share of the pie and places a horse that is dead out of the gate.

I admit it, I had high hopes for the Samsung Galaxy Tab. I personally prefer the 7" form factor over the 10" of the iPad, which is just too large to make it a device you can comfortably hold in one hand. When I heard from a reasonably reliable source that the Galaxy would cost $199 when it launches with a two-year contract, I felt that the Android Armada had a good chance to challenge Apple and prompt a much better second generation of tablets.

That was a month ago.

Today we know how much the Galaxy Tab costs and I have no idea who is sitting in those meetings and is coming up with bright ideas that, in the case of Sprint(NYSE: S), kill the Galaxy Tab before it is available. Note to Sprint: Save yourself some money and scrap the launch.

Sprint today said that the Tab would launch for $400, which is your price if you agree to a 2-year service agreement. Available plans start at $30 per month for 2 GB per month bandwidth or $60 for 5 GB. I'll forget the 2 GB plan, since we are talking about a device that is a content consumption device. What is the point of buying it and subscribing to a service, if you can't use it with reasonable bandwidth? So, it will cost you $60 per month, which ends up to be a $1840 bill over the contract period, excluding taxes and fees, which easily add another $300 over the bottom line, depending on where you live. Budget about $2100 for the Tab, which would be in addition to another $2000 you may easily spend on your smartphone over the same period.

Did I miss something here, or is $2100 for the Tab a bit excessive?

Even worse, this is not an unlimited data plan, and there is no voice included (like in Sprint's $70 smartphone "Everything Data" plan that includes unlimited data and unlimited messaging as well as 450 voice minutes). It is limited to 5 GB -- on a device that is specifically designed for the consumption of web content. Sure, you may use a Wi-Fi connection when you are at home or at a hotel, but if you are paying $60 a month for service, then you should be able to use it virtually all the time, in my opinion. So, what happens if you do?

Sprint says the $60 a month plan applies to 5 GB per month while on the Sprint network or 300 MB while roaming. In the best case (5 GB) you can send about 100,000 emails, 10,000 low-res photos, 1,700 MP3 or stream seven full-length movies. 100,000 movies may sound much, but if you want to occasionally listen to MP3 streams, spend time on YouTube occasionally, and stream Netflix movies down the road, this is not the bucket of bandwidth you may think. If you blow past the 5 GB barrier, Sprint will charge 5 cents for every MB. In other words, every full-length movie (700 MB) will cost you $35 just in 3G bandwidth. And don't even think about roaming, which would be $175 in extra charges per movie.

If you were to stream a movie over 3G every other day, and that would be your only usage, Sprint would charge you $332.80 in addition to the basic $60 service fee.

Limiting the available data bandwidth on a cell phone to 5 GB is one story, and it may be sufficient for most of us. But it may not be enough for a device that is exclusively designed for web consumption, such as a tablet.